Blueprint





Exhibit
10.1



 







SECURITIES PURCHASE AGREEMENT

 


This
Securities Purchase Agreement (as amended, restated, supplemented
or otherwise modified from time to time, this
“Agreement”) is dated as of June ____, 2018, between
MEDITE Cancer Diagnostics, Inc., a Delaware corporation (the
“Company”), and the purchasers identified on the
signature pages hereto (including its successors and permitted
assigns, the “Purchasers”).

 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an exemption from the registration requirements of Section 5 of
the Securities Act contained in Section 4(a)(2) thereof and/or Rule
506(b) thereunder, the Company desires to issue and sell to
Purchasers, and Purchasers desire to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and Purchasers agree as follows:

 



ARTICLE I.

 


DEFINITIONS

 


1.1         Definitions.
In addition to the words and terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms
have the meanings set forth in this Section
1.1:

 


“Action”
shall have the meaning ascribed to such term in Section
3.1(j).

 


“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.

 


“Board of
Directors” means the board of directors of the
Company.

 


“Business
Day” means any day except any Saturday, any Sunday, any day
which is a federal legal holiday in the United States or any day on
which banking institutions in the State of New York are authorized
or required by law or other governmental action to
close.

 


“Closing”
means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.


 


“Closing
Date” means the Business Day on which all of the Transaction
Documents have been executed and delivered by the applicable
parties thereto pursuant to Section 2.2(a) and Section 2.2(b), and
all conditions precedent to (i) Purchaser’s obligations to
pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities have been satisfied or
waived.


 


“Collateral
Agent” shall have the meaning ascribed in the Security
Agreement.


 


“Common
Stock” means the common stock of the Company, par value
$0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.

 


“Common Stock
Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt,
preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common
Stock.

 


 “Conversion
Price” shall have the meaning set forth in the
Notes.

 


“Conversion
Shares” shall mean the shares of the Company’s Common
Stock issuable upon conversion of the Note.

 


“Developer”
shall have the meaning ascribed to such term in Section
3.1(o)(v).

 




 

-1-








 






 

 


“Disqualification
Event” shall have the meaning ascribed to such term in
Section 3.1(z).

 


“Environmental
Laws” shall have the meaning ascribed to such term in Section
3.1(l).

 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

 


“Exempt
Issuance” means the issuance of: (a) securities to employees,
officers or directors of, or consultants to, the Company, pursuant
to any stock or option plan duly adopted for such purpose and
approved by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of
non-employee directors established for such purpose for services
rendered to the Company, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder, (c)
securities issued pursuant to any purchase money equipment loan or
capital leasing arrangement, real property leasing arrangement or
debt financing from a commercial bank or similar financial
institution, (d) securities in full or partial consideration in
connection with a bona fide strategic merger, acquisition,
consolidation or purchase of all or substantially all of the
securities or assets of a corporation or other entity approved by a
majority of the non-employee members of the Board of Directors, so
long as such issuance is not for the primary purpose of raising
capital by the Company, and (e) securities upon a stock split,
stock dividend or subdivision of the Common Stock.

 


“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).

 


“Guaranty
Agreements” means the Guaranty Agreements in the in the form
of Exhibit
“C” attached hereto.

 


“GPB
Note” means the $5,356,400 face value original issue discount
13.25% Senior Secured Convertible Note issued to GPB Debt Holdings
II, LLC, which shall be secured by a first priority lien on the
assets of the Company pursuant to a security agreement and
guaranteed pursuant to guaranty agreements.

 


“Hazardous
Materials” shall have the meaning ascribed to such term in
Section 3.1(l).

 


“Indebtedness”
means, with respect to any Person, without duplication, (a) all
indebtedness or liabilities for borrowed money or amounts owed in
excess of $10,000 (other than trade payables in the normal course
of business) (b) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not
the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business; and (c) the present value of any lease payments in excess
of $5,000 due under leases required to be capitalized in accordance
with GAAP.

 


“Independent
Third Party” means any Person who, immediately prior to the
contemplated transaction: (a) is not an officer or director of the
Company or an Affiliate of an officer or director of the Company,
(b) a Purchaser or an Affiliate of a Purchaser, (c) does not,
collectively with its Affiliates, own in excess of 10% of the
Common Stock on a fully-diluted basis (a “10% Owner”)
and is not an Affiliate of a 10% Owner, (d) is not the spouse or
descendent (by birth or adoption) of a Purchaser or 10% Owner or a
trust for the benefit of any 10% Owner (or their respective spouses
or descendants), and (e) is not a Person who through contract or
other arrangements (other than arrangements entered into in
connection with the contemplated transaction) would be an Affiliate
of any officer or director of the Company, the Purchaser, any 10%
Owner or the Company immediately after the contemplated
transaction.

 


“Intellectual
Property” means all of the following in any jurisdiction
throughout the world: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all
improvements thereto, and all U.S. and foreign patents, patent
applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all trademarks, service
marks, brand names, certification marks, trade dress, logos, trade
names, domain names, assumed names and corporate names, together
with all colorable imitations thereof, and including all goodwill
associated therewith, and all applications, registrations, and
renewals in connection therewith, (c) all copyrights, and all
applications, registrations, and renewals in connection therewith,
(d) all trade secrets under applicable state Laws and the common
Law and know-how (including formulas, techniques, technical data,
designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and
proposals), (e) all computer software (including source code,
object code, diagrams, data and related documentation), and (f) all
copies and tangible embodiments of the foregoing (in whatever form
or medium).

 


 




 

-2-








 






 


 “Irrevocable
Transfer Agent Instructions” has the meaning ascribed to such
term in Section 2.2(a)(vii).

 


“Issuer
Covered Person(s)” shall have the meaning ascribed to such
term in Section 3.1(z).

 


“Licensed
Intellectual Property Agreement” shall have the meaning
ascribed to such term in Section 3.1(o)(iv).

 


“Liens”
means a lien, charge, pledge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.

 


“Material
Adverse Effect” means: (a) a material adverse effect on the
legality, validity or enforceability of any Transaction Document,
(b) a material adverse effect on the results of operations, assets,
business, prospects or condition financial or otherwise of the
Company and the Subsidiaries, taken as a whole, in the long term or
(c) a material adverse effect on the Company’s ability to
perform in any material respect on a timely basis its obligations
under any Transaction Document; provided, however, that none of the
following shall be taken into account in determining whether there
has been, or could be, a Material Adverse Effect: (i) any adverse
change, event, development, or effect (whether short-term or
long-term) arising from or relating to (1) general business or
economic conditions, including such conditions related to the
business of the Company and its Subsidiaries, (2) any national or
international political or social conditions, (3) financial,
banking, or securities markets (including any disruption thereof
and any decline in the price of any security or any market index),
(4) changes in GAAP, (5) changes in laws, rules, regulations,
orders, or other binding directives issued by any governmental
entity, or (6) the taking of any action contemplated by any
Transaction Document, (ii) any failure to meet a forecast (whether
internal or published) of revenue, earnings, cash flow, or other
data for any period or any change in such a forecast, and (iii) any
existing event, occurrence, or circumstance with respect to which a
Purchaser has knowledge as of the date hereof.

 


“Material
Agreements” shall have the meaning ascribed to such term in
Section 3.1(aa).

 


“Material
Permits” shall have the meaning ascribed to such term in
Section 3.1(m).

 


“Maturity
Date” shall have the meaning ascribed to such term in the
Notes.

 


“Notes”
means the aggregate face value of up to $1,000,000 original issue
discount 12% Secured Convertible Notes issued to the Purchaser, in
the form of Exhibit
A attached hereto, which shall be secured pursuant to a
Security Agreement and guaranteed pursuant to the Guaranty
Agreements.


 


“Permitted
Liens” shall have the meaning set forth in the
Note.

 


“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.

 


“Pre-Notice”
shall have the meaning ascribed to such term in Section
4.7(a).

 


“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.

 


“Purchaser
Party” shall have the meaning ascribed to such term in
Section 4.5.

 


 “Required
Approvals” shall have the meaning ascribed to such term in
Section 3.1(e).

 


“Rule
144” means Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted
by the SEC having substantially the same purpose and effect as such
Rule.

 


“SEC”
means the United States Securities and Exchange
Commission.


 


“SEC
Documents” shall have the meaning ascribed to such term in
Section 3.1(h)

 

 




 

-3-








 






 


“Securities”
means the Note and the Shares.

 


“Securities
Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 


“Security
Agreement” means the security agreement, in the form of
Exhibit C attached
hereto, providing the Purchasers with a second lien on all of the
assets of the Company other than as provided in this
Agreement.

 


“Shares”
means the Common Stock issuable hereunder based upon the amount of
the Note up to an aggregate amount of 13,333,333 shares at a value
of $0.075 per share.

 


“Subscription
Amount” means $______________ payable in United States
dollars and in immediately available funds.

 


“Subsidiary”
means with respect to any entity at
any date, any direct or indirect corporation, limited or general
partnership, limited liability company, trust, estate, association,
joint venture or other business entity of which (a) more than
50% of (i) the outstanding capital stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the
board of directors or other managing body of such entity, (ii) in
the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited
liability company or (iii) in the case of a trust, estate,
association, joint venture or other entity, the beneficial interest
in such trust, estate, association or other entity business is, at
the time of determination, owned or controlled directly or
indirectly through one or more intermediaries, by such entity, or
(b) is under the actual control of the Company.

 


“Transaction
Documents” means this Agreement, the Note, the Security
Agreement, the Guaranty Agreement, and any other documents or
agreements executed in connection with the transactions
contemplated hereunder.

 


“Transfer
Agent” means Computershare, the current transfer agent of the
Company, with a mailing address of 33 N. LaSalle Street,
11th
Floor, Chicago, Illinois 60602 and any successor
transfer agent of the Company.

 


“Variable
Rate Transaction” shall have the meaning ascribed in Section
4.8(a).

 



ARTICLE II.

 


PURCHASE
AND SALE

 


2.1           Purchase
and Closing.
Closing.
On the Closing Date, upon the terms and subject to the conditions
set forth herein, the Company agrees to sell, and the Purchasers
agree to purchase, the Note and the Shares. Purchasers shall
deliver to the Company, via wire transfer immediately available
funds equal to the Subscription Amount, and the Company shall
deliver to the Purchasers the Notes and Shares on the Closing Date,
and the Company and the Purchasers shall deliver the other items
set forth in Section 2.2 deliverable at the Closing. Upon
satisfaction of the covenants and conditions set forth in Sections
2.2 and 2.3, the Closing shall occur at the offices of the Company
or such other location as the parties shall mutually
agree.


 


2.2         Deliveries.

 


(a)           On
or prior to the Closing, the Company shall deliver or cause to be
delivered to the Purchasers the following:

 


(i)
this Agreement duly executed by the Company;

 


(ii)
the Guaranty Agreements duly executed by each of MEDITE Enterprise,
Inc., MEDITE GmbH, MEDITE Lab Solutions Inc., and CytoGlobe,
GmbH;

 


(iii)
a Security Agreement providing the Purchasers with a second lien on
all of the assets of the Company and its Subsidiaries;

 


(iv)
the Notes registered in the name of the Purchasers;

 


 




 

-4-








 






 


(v)
the Shares, registered in the name of the Purchasers, subject to
adjustment as described therein;

 


(vi)
Within two (2) Business Days prior to the Closing,
the Company and each Subsidiary shall have delivered or caused to
be delivered to the Purchasers and the Collateral Agent a
perfection certificate, duly completed and executed by the each, in
form and substance satisfactory to the
Purchasers;

 


(vii)
irrevocable instructions from the Company to the Transfer Agent and
any subsequent transfer agent in the form satisfactory to the
Purchasers (the “Irrevocable Transfer Agent
Instructions”) to issue certificates or credit shares
to the applicable balance accounts at The Depository Trust Company
registered in the name of the Purchasers or its respective
nominee(s), for the Shares and shares of Common Stock issuable upon
conversion of the Notes;

 


(viii)
an Officer’s Certificate of the Company and each Subsidiary
certifying as to the conditions set forth in Section
2.3(a);

 


(ix) a
Secretary’s Certificate of the Company and each Subsidiary in
form and substance reasonably satisfactory to the
Purchasers;

 


(x)
Good standing certificates as of a recent date evidencing the good
standing of the Company and each Subsidiary in its jurisdiction of
organization, if applicable or such concept has
meaning.

 


(b)           On
or prior to each Closing, the Purchasers shall deliver or cause to
be delivered to the Company the following:


 


(i) the
Subscription Amount subject to the closing by wire transfer;
and


 


(ii)
Subordination and Intercreditor Agreement by and among the Company,
the Purchasers and the senior lenders set forth therein attached
hereto as Exhibit “D”.

 


2.3         Closing
Conditions.

 


(a)           The
obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being
met:

 


(i)
the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing of the representations and warranties of the
Purchasers contained herein (unless as of a specific date therein
in which case they shall be accurate as of such date);

 


(ii)
all obligations, covenants and agreements of Purchasers required to
be performed at or prior to the date of the Closing shall have been
performed; and

 


(iii)
the delivery by Purchasers of the items set forth in Section 2.2(b)
of this Agreement.

 


(b)           The
obligations of the Purchasers hereunder in connection with each
Closing are subject to the following conditions being
met:

 


(i)
the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing of the representations and warranties of the Company
contained herein (unless as of a specific date therein in which
case they shall be accurate as of such date);

 


(ii)
all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing shall have been
performed;

 


 




 

-5-








 






 


(iii)
the delivery by the Company of the items set forth in Section
2.2(a) of this Agreement; and

 


(iv)
there shall have been no Material Adverse Effect with respect to
the Company since the date hereof.

 


 

 



ARTICLE III.

 


REPRESENTATIONS
AND WARRANTIES

 


3.1         Representations
and Warranties of the Company. Except as set forth in
the Disclosure Schedules, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation or
otherwise made herein to the extent of the disclosure contained in
the corresponding section of the Disclosure Schedules, the Company
hereby makes the following representations and warranties to
Purchasers as of the date hereof:

 


(a)           Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set
forth in Schedule
3.1(a). The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all of the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

 


(b)           Organization
and Qualification. The Company and each of the Subsidiaries
is an entity duly incorporated or otherwise organized, validly
existing and in good standing, if applicable, under the laws of the
jurisdiction of its incorporation or organization, with the
requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Neither
the Company nor any Subsidiary is in violation nor default of any
of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing, if applicable, as a
foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes
such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have
or reasonably be expected to result in a Material Adverse Effect
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 


(c)           Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each
of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 


 




 

-6-








 






 


(d)           No
Conflicts. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and
the consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any
Subsidiary (other than as provided in the Transaction Documents),
or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected.

 


(e)           Filings,
Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.13 of this
Agreement, (ii) filings necessary to perfect the Liens in
favor of the Purchasers under the Security Agreement, and (iii)
such filings as are required to be made under applicable state
securities laws (collectively, the “Required
Approvals”).

 


(f)           Issuance
of the Securities. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company. The Shares, when issued upon conversion of the Notes, and
the Warrant Shares, when issued in accordance with the terms of the
Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has
reserved from its duly authorized capital stock a number of shares
of Common Stock issuable pursuant to the Notes and the Warrant
equal to the amount set forth in Section 4.6.

 


(g)           Capitalization.
The capitalization of the Company as of September 30, 2017 is as
set forth in Schedule
3.1(g). No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents.
Except as a result of the purchase and sale of the Securities, the
securities in favor of GPB pursuant to the Senior Documents, or as
set forth on Schedule
3.1(g), there are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common
Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents or capital stock of any
Subsidiary. The issuance and sale of the Securities will not
obligate the Company or any Subsidiary to issue shares of Common
Stock or other securities to any Person (other than the Purchaser)
and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under
any of such securities. There are no outstanding securities or
instruments of the Company or any Subsidiary that contain any
redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. Schedule 3.1(g) lists all stock
appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement and all securities
issued thereunder . All of the outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. Except as
set forth on Schedule
3.1(g), there are no stockholders agreements, voting
agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or,
to the knowledge of the Company, between or among any of the
Company’s stockholders.

 


 




 

-7-








 






 


(h)           SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof,
the Company has filed all reports, schedules, forms, proxy
statements, information statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act, excluding due dates (all of the foregoing
filed prior to the date hereof including, without limitation,
Current Reports on Form 8-K by the Company with the SEC whether
required to be filed or not (but excluding Item 7.01 thereunder)
and all exhibits and appendices included therein other than
Exhibits 99.1 to Form 8-K) and financial statements, notes and
schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the “SEC Documents”).
The Company has delivered or has made available to the Purchasers
or their respective representatives true, correct and complete
copies of each of the SEC Documents not available on the EDGAR
system (if any). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in
orde
r to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The financial statements of
the Company provided to the Purchasers have been prepared in
accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in accordance with GAAP in all
material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal year-end
audit adjustments and footnotes. Schedule 3.1(h) lists all material year-end
audit adjustments made to the financial statements of the Company
provided to the Purchasers.

 


(i)           Material
Changes; Undisclosed Events, Liabilities or Developments.
Since September 30, 2017, (i) there has been no event, occurrence
or development that has had or that would reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A)
trade payables and accrued expenses incurred in the ordinary course
of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial
statements pursuant to Material Permit or disclosed in the
financial statements, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its
stockholders (other than as required pursuant to the terms of any
of its securities outstanding as of the date hereof) or purchased,
redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) other than as described on Schedule
3.1(i), the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing stock
or option plans duly adopted for such purpose or upon approval by a
majority of the non-employee members of the Board of Directors or a
majority of the members of a committee of non-employee directors
established for such purpose for services rendered to the
Company.

 


(j)           Litigation.
There is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction
Documents or the issuance of the Securities or (ii) could, if
there were an unfavorable decision, have or reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof (in such capacity),
is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. Except as set forth on
Schedule 3(i),
there has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the SEC or other
governmental or regulatory authority involving the Company or any
current or former director or officer of the Company.

 


 




 

-8-








 






 


(k)         
Compliance. Except
as set forth on Schedule
3(k), neither the Company nor any Subsidiary: (i) is in
default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both,
would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim
that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any judgment, decree or order
of any court, arbitrator or other governmental authority or (iii)
is in violation of any statute, rule, ordinance or regulation of
any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes,
occupational health and safety, product quality and safety and
employment and labor matters, except as could not have reasonably
been expected to and does not result in a Material Adverse
Effect.

 


(l)           Environmental
Laws. The Company and its Subsidiaries (i) are in compliance
with all federal, state, local and foreign laws relating to
pollution or protection of human health or the environment
(including ambient air, surface water, groundwater, land surface or
subsurface strata), including laws relating to emissions,
discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or
wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or
regulations, issued, entered, promulgated or approved thereunder
(“Environmental Laws”); (ii) have received all permits
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such
permit, license or approval.

 


(m)        
Regulatory Permits.
The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct
their respective businesses, except where the failure to possess
such permits could not reasonably be expected to and does not
result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any Material Permit.

 


(n)         
Title to Assets.
The Company and the Subsidiaries have good and marketable title in
fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in
each case free and clear of all Liens, except for Permitted Liens.
Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are
in compliance.

 


(o)         
Intellectual
Property.

 


(i)
The Company and each Subsidiary owns
or possesses or has the right to use pursuant to a valid and
enforceable written license, sublicense, agreement, or permission
all Intellectual Property necessary for the operation of the
business of the Company and each Subsidiary as presently conducted.
The Company and each Subsidiary has made available to the
Purchasers a true and complete copy of each such written license,
sublicense, agreement or permission.

 


(ii)
To the knowledge of the Company, the
Intellectual Property does not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any
Intellectual Property rights of third parties, and the Company has
no Knowledge that facts exist which indicate a likelihood of the
foregoing. Neither the Company nor any Subsidiary has received any
charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or conflict
(including any claim that the Company must license or refrain from
using any Intellectual Property rights of any third party). To the
Knowledge of the Company, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict
with, any Intellectual Property rights of the Company or any
Subsidiary.

 


 




 

-9-








 






 

 


(iii)
Except as otherwise disclosed
on Schedule
3.1(o), neither the Company nor
any Subsidiary has any pending patent applications or applications
for registration that either entity has made with respect to any
Intellectual Property. Schedule
3.1(o) identifies each license,
sublicense, agreement, or other permission that the Company or a
Subsidiary has granted to any third party with respect to any of
such Intellectual Property (together with any exceptions). The
Company has made available to the Purchasers correct and complete
copies of all such licenses, sublicenses, agreements, and
permissions (as amended to date) (“Intellectual Property
Agreements”). Schedule 3.1(o)
also identifies each registered and
unregistered trademark, service mark, trade name, corporate name,
URLs or Internet domain name used by the Company and each
Subsidiary in connection with its business and which is not
licensed from a third party. With respect to each item of
Intellectual Property required to be identified in
Schedule
3.1(o):

 



(A) 

The
Company and each Subsidiary owns and possesses all right, title,
and interest in and to the item, free and clear of any Lien,
license, or other restriction or limitation regarding use or
disclosure;





 



(B) 

The
item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;





 



(C) 

No
Action, claim, or demand is pending or, to the knowledge of the
Company, is threatened that challenges the legality, validity,
enforceability, use, or ownership by the Company or any Subsidiary;
and





 



(D) 

Neither
the Company nor any Subsidiary has agreed to indemnify any Person
for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.





 


(iv)
Schedule
3.1(o)(iv) identifies each item
of Intellectual Property that any third party owns and that the
Company or a Subsidiary uses pursuant to license, sublicense,
agreement, or permission, excluding off-the-shelf software
purchased or licensed by the Company or a Subsidiary. The Company
has made available to the Purchasers correct and complete copies of
all such licenses, sublicenses, agreements, and permissions (each
as amended to date) (each, a “Licensed Intellectual Property
Agreement”). With respect to each Licensed Intellectual
Property Agreement:

 



(A) 

The
Licensed Intellectual Property Agreement is legal, valid, binding,
enforceable, and in full force and effect;





 



(B) 

Neither
the Company nor any Subsidiary is in breach or default, and no
event has occurred that with notice or lapse of time would
constitute the Company’s or a Subsidiary’s breach or
default or permit the counterparty rights to termination,
modification, or acceleration thereunder, which as to any such
breach, default or event could have a Material Adverse Effect on
the Company or a Subsidiary;





 



(C) 

No
party to such Licensed Intellectual Property Agreement has
repudiated any provision thereof;





 



(D) 

Except
as set forth in such Licensed Intellectual Property Agreement,
neither the Company nor a Subsidiary has received written or verbal
notice or otherwise has Knowledge that the underlying item of
Intellectual Property is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; and





 



(E) 

Except as set forth on Schedule
3.1(o)(iv), neither the Company
nor any Subsidiary has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or
permission.





 


 




 

-10-








 






 


(v)
Each Person who participated in the
creation, conception, invention or development of the Intellectual
Property currently used in the business of the Company and each
Subsidiary (each, a “Developer”) which is not licensed
from third parties has executed one or more agreements containing
industry standard confidentiality, work for hire and assignment
provisions, whereby the Developer has assigned to the Company and
each Subsidiary, as applicable, all copyrights, patent rights,
Intellectual Property rights and other rights in the Intellectual
Property, including all rights in the Intellectual Property that
existed prior to the assignment of rights by such Person to the
Company and the applicable Subsidiary. The Company has made
available to the Purchasers copies of any such agreements and
assignments from each such Developer (collectively, the
“Developer Agreements”).


 


  (vi)
Each Developer has signed a
non-disclosure agreement with the Company and each Subsidiary. The
Company has made available to the Purchasers copies any such
non-disclosure agreements from each such Person, if
any.

 


(p)        
Insurance. The
Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary for entities with financial
positions similar to the Company in the businesses in which the
Company and the Subsidiaries are engaged. Neither the Company nor
any Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant
increase in cost.

 


(q)        
Transactions With
Affiliates and Employees. Except as set forth on
Schedule 3.1(q),
none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or
lending of money to or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner.

 


(r)       
  Certain
Fees. No brokerage or finder’s fees or commissions are
or will be payable by the Company or any Subsidiary to any broker,
financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction
Documents.

 


(s)         
Investment Company.
The Company is not, and is not an Affiliate of, and immediately
after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as
amended.

 


(t)           Registration
Rights. Except as disclosed on Schedule 3(t), no Person has
any right to cause the Company or any Subsidiary to effect the
registration under the Securities Act of any securities of the
Company or any Subsidiary other than pursuant to the Registration
Rights Agreement, in favor of GPB pursuant to the Senior Documents
or pursuant to Schedule 3.1(t).

 


(u)         
Application of Takeover
Protections. The Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights
under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

 


 




 

-11-








 






 


(v)         
Disclosure. All of
the disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby,
including the schedules to this Agreement, is true and correct and
does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that no
Purchasers makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2 hereof.

 


(w)         
No Integrated
Offering. Neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would
cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of the Securities Act that
would require the registration of any such securities under the
Securities Act.

 


(x)           Solvency.
Based on the consolidated financial condition of the Company as of
each Closing, after giving effect to the receipt by the Company of
the proceeds from the sale of the Securities hereunder, (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. As of the date hereof, the Company has no
intention to file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within the
two years from the Closing Date. Schedule 3.1(x) set forth as of
the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments or guarantees.

 


(y)           Tax
Status. The Company and its Subsidiaries each (i) has made
or filed all United States federal, state and local income and all
foreign income and franchise tax returns, reports and declarations
required by any jurisdiction to which it is subject including
filing extension periods, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply, except in each case those which are being
contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in
accordance with GAAP. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

 


(z)           No
Disqualification Events. With respect to the Securities to
be offered and sold hereunder in reliance on Rule 506(b) under the
Securities Act, neither the Company nor, to the knowledge of the
Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of
20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, or any
promoter (as that term is defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer Covered Person” and, together,
“Issuer Covered Persons”) is subject to any of the
“Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a
Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The
Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has made available to the
Purchasers a copy of any disclosures provided
thereunder.

 


 




 

-12-








 






 


(aa)         
Material
Agreements. The agreements set forth on Schedule 3.1(aa) (the
“Material Agreements”) are valid, binding and
enforceable in accordance with their terms against the Company, and
are in full force and effect, except as the enforcement thereof may
be limited by bankruptcy laws, other similar laws affecting
creditors’ rights and general principles of equity affecting
the availability of specific performance and other equitable
remedies. Except as set forth on Schedule 3.1(aa), neither the
Company nor any other party thereto is in material default
thereunder, nor has there occurred any event that with notice or
lapse of time, or both, would constitute a material default by the
Company or any other party thereunder. Accurate and complete copies
of each written Material Agreement have been delivered or otherwise
made available to the Purchasers. Except as set forth on
Schedule 3.1(aa),
as of the date of this Agreement, the Company nor any of its
Affiliates has received any notification that any party to a
Material Agreement intends to terminate such Material
Agreement.

 


(bb)         
Customers and
Suppliers. Neither the Company nor any Subsidiary has
received any written or oral notice, and neither the Company nor
any Subsidiary knows or has any reason to believe, that any
customer of its with annual gross sales of in excess of $100,000 or
supplier or products to the Company or a Subsidiary in excess of
$100,000 (i) has ceased, or in the reasonably foreseeable future
may cease, to use the services of the Company or a Subsidiary, (ii)
has substantially reduced, or in the reasonably foreseeable future
may substantially reduce, the use of the services of the Company or
a Subsidiary or (iii) has terminated or materially altered, or in
the reasonably foreseeable future would reasonably be expected to
terminate or materially alter its business relations with the
Company or a Subsidiary.

 


3.2         Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other
Purchaser, hereby represents and warrants as of the date hereof and
as of each Closing to the Company as follows (unless as of a
specific date therein):

 


(a)           Organization;
Authority. Such Purchaser is
either an individual or an entity duly incorporated or formed,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and performance by the Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of the Purchaser. Each
Transaction Document to which it is a party has been duly executed
by the Purchaser, and when delivered by the Purchaser in accordance
with the terms hereof, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 


(b)           Understandings
or Arrangements. Such Purchaser
is acquiring the Securities as principal for its own account and
has no direct or indirect arrangement or understandings with any
other Persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting the
Purchaser’s right to sell the Securities in compliance with
applicable federal and state securities laws). Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its
business. Such Purchaser understands that the Securities are
“restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and
is acquiring such Securities as principal for its own account and
not with a view to or for distributing or reselling such Securities
or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of
distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other Persons to
distribute or regarding the distribution of such Securities in
violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting the
Purchaser’s right to sell such Securities in compliance with
applicable federal and state securities laws).

 


(c)           Purchaser
Status. At the time the
Purchaser was offered the Securities, it was, and as of the date
hereof it is, an “accredited investor” within the
meaning of Rule 501 under the Securities Act.

 


 




 

-13-








 






 


(d)           Experience
of Such Purchaser. Such
Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser
is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete
loss of such investment.

 


(e)           Access
to Information. Such Purchaser
acknowledges that (i) it has had the opportunity to review the
Transaction Documents (including all exhibits and schedules
thereto), (ii) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering
of the Securities and the merits and risks of investing in the
Securities; (iii) access to information about the Company and its
financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its
investment; and (iv) the opportunity to obtain such additional
information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Such
Purchaser acknowledges and agrees that neither the Company nor
anyone else has provided the Purchaser with any information or
advice with respect to the Securities nor is such information or
advice necessary or desired.

 


(f)           Confidentiality.
Other than to other Persons party to this Agreement or to the
Purchaser’s representatives, including, without limitation,
its officers, directors, partners, legal and other advisors,
employees, agents and Affiliates, the Purchaser has maintained the
confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this
transaction).

 


(g)           Legends.
The Purchaser understands that the Securities and any securities
issued in respect of or exchange for the Securities, may be notated
with one or all of the following legends:

 




(i)

[THESE
SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THESE SHARES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]





 


[NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 


 




 

-14-








 






 


[NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 


(ii) Any
legend set forth in, or required by, the other Transaction
Documents.

 


(iii) Any
legend required by the securities laws of any state to the extent
such laws are applicable to the Securities represented by the
certificate, instrument, or book entry so legended.

 



ARTICLE IV.

 


OTHER
AGREEMENTS OF THE PARTIES

 


4.1         
Information
Rights. So long as the Note
remains outstanding and until such time as the Purchasers no longer
is the beneficial owner of at least ten percent (10%) of the
outstanding Common Stock, on a fully diluted basis, the Company
shall provide the Purchasers with (i) monthly financial reports
including A/R and A/P statements within 30 days of each month end,
with such reports to also include comparisons of budgeted to actual
operations (ii) quarterly financial reports within 30 days of each
quarter end, with such reports to include comparisons of budgeted
to actual operations, (iii) yearly financial reports within 60 days
of each year end, with such reports to include comparisons of
budgeted to actual operations and (iv) audited financials within
120 days of each year end. Upon the request of the Purchasers, the
Company shall share with the Purchasers status updates on
manufacturing and capex, shipment of
products, sales pipeline, board decisions and relevant regulatory
and licensing developments. The Company shall use best efforts to
provide accurate quarterly and yearly reports, subject to
adjustments recommended by the Company’s
auditors.


 


4.2         
Over
Allotment Option. The Company
may, at its sole discretion, seek to issue up to an additional
$750,000 of Notes with the additional issuance of Shares on the
same terms and conditions as set forth herein (the “Over
Allotment Option”}. The Purchasers shall have the right to
participate on a pro rata basis in any additional issuance of Notes
and Shares pursuant to the Company’s exercise of the Over
Allotment Option.


 


4.3         
Shareholder Rights
Plan. No claim will be made or
enforced by the Company or, with the consent of the Company, any
other Person, that any Purchaser is an “Acquiring
Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights
agreement) or similar anti-takeover plan or arrangement in effect
or hereafter adopted by the Company, or that any Purchaser could be
deemed to trigger the provisions of any such plan or arrangement,
by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the
Purchasers.


 


4.4         
Use of
Proceeds. Schedule 4.4 sets
forth a detailed list of the use of proceeds. The Company shall use
the net proceeds from the sale of the Securities hereunder for
working capital and capital expenditures related to sales and
marketing and application expansion and the settlement of a lawsuit
with the Company’s former CFO, and shall not use such
proceeds for the satisfaction of any portion of the Company’s
Indebtedness (other than as set forth on Schedule 4.4
hereto, the payment of trade payables
in the ordinary course of the Company’s business and prior
practices and other than
ordinary course payments of principal and interest on the
Company’s outstanding secured promissory notes. The only
Indebtedness of the Company outstanding after the Closing shall be
Permitted Indebtedness.

 


 




 

-15-








 






 


4.5         
Indemnification of
Purchasers. Subject to the
provisions of this Section 4.5, the Company will indemnify and hold
the Purchasers and each of their directors, officers, shareholders,
members, partners, employees and agents (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each
Person who controls a Purchaser (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling Persons (each, a
“Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as
a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents,
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is
based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party that constitutes fraud, gross negligence,
willful misconduct or malfeasance) or (c) any untrue or alleged
untrue statement of a material fact contained in any registration
statement, any prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any prospectus or
supplement thereto, in light of the circumstances under which they
were made) not misleading. If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense
and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for
the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party
under any Transaction Document (x) for any settlement by a
Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or
(y) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or
in the other Transaction
Documents; or (z) to the extent
caused solely by a Purchaser Party’s gross negligence or
willful misconduct. The indemnification required by this Section
4.5 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are
received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.


 


4.6         
Reservation of Common
Stock. As of the date hereof,
the Company has reserved and the Company shall continue to reserve
and keep available at all times, free of preemptive rights, shares
of Common Stock, subject to adjustment for stock splits and
dividends, combinations and similar events, equal to the amounts
required by the Transaction Documents. The Company shall not enter
into any agreement or file any amendment to its Certificate of
Incorporation (including the filing of a Certificate of
Designation) which conflicts with this Section 4.6 while the Notes
remain outstanding.


 


4.7         
Pre-Emptive
Rights. The Purchasers shall
have pre-emptive rights with respect to future securities offerings
by the Company so long as at least 15% of the Notes are
outstanding.


 


 




 

-16-








 






 


4.8         
Subsequent
Equity Sales.

 


(a)          From
the date hereof until such time as the Purchasers no longer holds
the Notes, the Company will not, without the consent of all of
the then-outstanding Note holders, enter into any Equity Line of Credit or similar
agreement, nor issue nor agree to issue any Variable Priced Equity
Linked Instruments (collectively, the “Variable Rate
Transactions”). For purposes hereof, “Equity Line of
Credit” means any transaction involving a written agreement
between the Company and an investor or underwriter whereby the
Company has the right to “put” its securities to the
investor or underwriter over an agreed period of time and at future
determined price or price formula (other than customary
“preemptive” or “participation” rights or
“weighted average” or “full-ratchet”
antidilution provisions or in connection with fixed-price rights
offerings and similar transactions that are not Variable Priced
Equity Linked Instruments), and “Variable Priced Equity
Linked Instruments” means: (A) any debt or equity securities
which are convertible into, exercisable or exchangeable for, or
carry the right to receive additional shares of Common Stock either
(1) at any conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance
of such debt or equity security, or (2) with a conversion, exercise
or exchange price that is subject to being reset on more than one
occasion at some future date at any time after the initial issuance
of such debt or equity security due to a change in the market price
of the Company’s Common Stock since date of initial issuance
(other than customary “preemptive” or
“participation” rights or “weighted
average” or “full-ratchet” antidilution
provisions or in connection with fixed-price rights offerings and
similar transactions), and (B) any amortizing convertible security
which amortizes prior to its maturity date, where the Company is
required or has the option to (or any investor in such transaction
has the option to require the Company to) make such amortization
payments in shares of Common Stock which are valued at a price that
is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance
of such debt or equity security (whether or not such payments in
stock are subject to certain equity conditions). For purposes of
determining the total consideration for a convertible instrument
(including a right to purchase equity of the Company) issued,
subject to an original issue or similar discount or which principal
amount is directly or indirectly increased after issuance, the
consideration will be deemed to be the actual cash amount received
by the Company in consideration of the original issuance of such
convertible instrument.

 


(b)           Notwithstanding
the foregoing, this Section 4.8
shall not apply in respect of an
Exempt Issuance (except that no Variable Rate Transaction shall be
an Exempt Issuance). The Company shall provide the Purchasers with
notice of any such issuance or sale in the manner for disclosure of
Subsequent Financings set forth in Section
4.7.

 


4.9         Rule
144 Opinion and Registration Rights.

 


 (a)           Provided
that the provisions of Rule 144 so permit, the Company shall
deliver to the Purchasers an opinion of counsel (which opinion the
Company will be responsible for obtaining at its own cost) that the
Shares and/or Conversion Shares may be resold pursuant to Rule 144
free of restrictive legends.

 


(b)           The
Purchasers shall have piggy-back registration rights with respect
to the resale of the Shares and/or Conversion
Shares.

 


 (c)           Each
Purchaser acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell or otherwise transfer
the Securities or any interest therein without complying with the
requirements of the Securities Act and applicable law.

 


 (d)           Both
the Company and the Transfer Agent, and their respective directors,
executive officers, employees and agents, may rely on this
Section
4.9.

 


 




 

-17-








 






 

4.10           
Conversion and Exercise
Procedures. The forms of Conversion Notice and Notice of
Exercise included in the Notes set forth the totality of the
procedures required of the Purchasers in order to convert the
Notes. No additional legal opinion, other information or
instructions shall be required of the Purchasers to convert their
Notes. Without limiting the preceding sentences, no ink-original
Conversion Notice or Notice of Exercise shall be required, nor
shall any medallion guarantee (or other type of guarantee or
notarization) of any Conversion Notice or Notice of Exercise form
be required in order to convert the Note. The Company shall honor
conversions of the Notes and shall deliver the Conversion Shares in
accordance with the terms, conditions and time periods set forth in
the Transaction Documents.


 


4.11           
Maintenance of
Property. The Company shall use
its commercially reasonable efforts to keep all of its property,
which is necessary or useful to the conduct of its business, in
good working order and condition, ordinary wear and tear
excepted.


 


4.12          

Preservation
of Corporate Existence. The
Company shall preserve and maintain its corporate existence,
rights, privileges and franchises in the jurisdiction of its
incorporation, and qualify and remain qualified, as a foreign
corporation in each jurisdiction in which such qualification is
necessary in view of its business or operations and where the
failure to qualify or remain qualified might reasonably have a
Material Adverse Effect.


 


4.13      
     Blue
Sky. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchasers at
the applicable Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of the
Purchasers. s


 


4.14           SEC
Reports. During the term the Notes remains outstanding, the
Company hereby covenants and agrees to timely file any and all
periodic and other reports required by law with the SEC, including
without limitation, Forms 10K, 10Q and 8K. The Company further
covenants and agrees that with respect to any registration
statement filed with the SEC on Form S-1,or any other applicable
form of registration statement whereby Purchaser’s Shares
and/or Conversion Shares are registered for resale pursuant to
Purchasers’ piggy-back registration rights set forth in
Section 4.9(b) herein, the Company shall make such filings and take
such actions as are necessary to cause any such registration
statement to remain effective during the term the Notes remain
outstanding.


 


4.15           

Ranking of
Notes. Other than Permitted
Indebtedness subject to Permitted Liens and the GPB and affiliated
Senior Secured Note Holders, no Indebtedness of the Company and/or
any Subsidiaries, at the Closing will be in any manner and/or for
any reason (i) senior to the Notes and/or any other liabilities
and/or obligations of the Company and/or any Subsidiaries to the
Purchasers in right of payment or otherwise, and/or (ii)
pari passu
with the Notes and/or any other
liabilities and/or obligations of the Company and/or any
Subsidiaries to the Purchasers in right of payment and/or in
otherwise, whether with respect to payment, redemptions, principal,
interest, or upon liquidation, dissolution or
otherwise.


 


4.16           

Subsidiary
Guarantees, Etc.
 For so long as the Notes
remain outstanding, upon any entity becoming a Subsidiary, the
Company shall cause each such Subsidiary to become party to all of
the Security Documents, to the extent required in the Security
Documents and take all actions required by the Security Documents
in form and substance satisfactory to the Collateral Agent and the
Purchaser.


 


4.17           
Intentionally Omitted.


 


4.18           
Intentionally Omitted.


 


 




 

-18-








 






 

 


4.19 Disclosure of
Confidential Information. The
Company shall not, and the Company shall cause each of the
Subsidiaries and each of its and their respective officers,
directors, employees and agents not to, provide the Purchasers with
any material, non-public information regarding the Company and/or
any of the Subsidiaries from and after the date hereof without the
express prior written consent of the Purchasers (which may be
granted or withheld in the Purchasers’ sole discretion). In
the event of a breach of any of the foregoing covenants, the
Purchasers shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of such
breach or such material, non-public information, as applicable,
without the prior approval by the Company, any of its respective
Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Purchasers shall not have any
liability to the Company, any of the Subsidiaries, or any of its or
their respective officers, directors, employees, affiliates,
stockholders or agents, for any such disclosure. To the extent that
the Company or any of the Subsidiaries delivers any material,
non-public information to the Purchasers without the
Purchasers’ prior written consent, the Company hereby
covenants and agrees that the Purchasers shall not have any duty of
confidentiality with respect to, or a duty not to trade on the
basis of, such material, non-public information;. If the Company,
any of its respective Subsidiaries, or any of their respective
officers, directors, employees or agents, provides the Purchasers
with material non-public information relating to the Company and/or
any of the Subsidiaries, and such disclosure is without the consent
of the Purchasers, the Company shall immediately publicly disclose
such confidential information on a Current Report on Form 8-K or
otherwise.

 


 



ARTICLE V.

 


MISCELLANEOUS

 


5.1         Reserved.

 


5.2         Fees
and Expenses. The Company shall
reimburse the lead investor for its fees and expenses incurred in
connection with the review of the Transaction Documents up to a
maximum of $10,000. Except as expressly set forth herein and in the
Transaction Documents to the contrary, each party shall pay the
documented fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other documented out-of-pocket
expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any
instruction letter delivered by the Company and any exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties
levied in connection with the delivery of any Securities to the
Purchaser.

 


5.3         Entire
Agreement. The Transaction
Documents, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to
such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.

 


5.4         Notices.
Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile or email attachment at the facsimile number or email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Business Day, (b) the
next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the
facsimile number or email address as set forth on the signature
pages attached hereto on a day that is not a Business Day or later
than 5:30 p.m. (New York City time) on any Business Day, (c) the
second (2nd)
Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages attached hereto.

 


5.5         Amendments;
Waivers. No provision of this
Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the
Company and all of the Purchasers of the then-outstanding Notes or,
in the case of a waiver, by the party against whom enforcement of
any such waived provision is sought. No waiver of any default with
respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right. Any amendment effected in
accordance with accordance with this Section 5.5 shall be binding
upon the Purchasers and holder of Securities and the
Company.

 


 




 

-19-








 






 


5.6         Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign
this Agreement or any rights or obligations hereunder without the
prior written consent of the Purchasers then holding the
outstanding Notes (other than by merger). Each Purchaser may assign
any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided that
such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchaser”; provided, so
long as no Event of Default has occurred and is continuing, the
Secured Party shall not assign any of its rights hereunder to a
competitor of any Company.

 


5.7         No
Third-Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Sections 4.5 and 4.9
and this Section 5.7.

 


5.8         Governing
Law; Exclusive Jurisdiction.
All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any Action or Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
Action or Proceeding is improper or is an inconvenient venue for
such Proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such
Action or Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If any party shall commence an Action or
Proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company elsewhere in
this Agreement, the prevailing party in such Action or Proceeding
shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Action or
Proceeding.

 


5.9         
Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities.

 


5.10       
Execution.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or
“.pdf” signature page were an original
thereof.

 


5.11       
Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired, or invalidated, as long as the essential terms and
conditions of this Notes for each party remain valid, binding, and
enforceable. The parties shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term,
provision, covenant or restriction.

 


 




 

-20-








 






 


5.12      
Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert
in any Action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

 


5.13      
Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

 


5.14      
Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.

 


5.15     
WAIVER OF JURY
TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION
BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND
EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 



(Signature Pages Follow)

 




 

-21-









 


 






 

 


 

 


IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

 


 


	


MEDITE CANCER DIAGNOSTICS, INC.


 


 

	

Address
for Notice:


 


	

By:___________________________________________


Name:
Stephen Von Rump


Title:
Chief Executive Officer


 


With a
copy to (which shall not constitute notice):

	

4203 SW
34th Street


Orlando,
Florida 32811


 


 


	
 

	
 







 


 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASERS FOLLOWS]


 


 


 




 

-22-








 






 


[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]


 


IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


Name of
Purchaser: _____________________________________


 


Signature of Authorized Signatory of
Purchaser: _________________________________


 


Email
Address of Authorized Signatory:
_________________________________________


 


Facsimile Number of
Authorized Signatory:
__________________________________________


 


Address
for Notice to Purchaser:


 


Address
for Delivery of Securities to Purchaser (if not same as address for
notice):


 


EIN
Number: _______________________


 


 


 


[SIGNATURE
PAGES CONTINUE]


 


 




 

-23-








 






 


[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]


 


IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


Name of
Purchaser:


 


Signature of Authorized Signatory of
Purchaser: _________________________________


 


Name of
Authorized Signatory:


 


Title
of Authorized Signatory:


 


Email
Address of Authorized Signatory:
_________________________________________


 


Facsimile Number of
Authorized Signatory:
__________________________________________


 


Address
for Notice to Purchaser:


 


Address
for Delivery of Securities to Purchaser (if not same as address for
notice):


 


EIN
Number: _______________________


 


 


 


[SIGNATURE
PAGES CONTINUE]


 

 




 

-24-








 






 


[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]


 


IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


Name of
Purchaser:


 


Signature of Authorized Signatory of
Purchaser: _________________________________


 


Name of
Authorized Signatory:


 


Title
of Authorized Signatory:


 


Email
Address of Authorized Signatory:
_________________________________________


 


Facsimile Number of
Authorized Signatory:
__________________________________________


 


Address
for Notice to Purchaser:


 


Address
for Delivery of Securities to Purchaser (if not same as address for
notice):


 


EIN
Number: _______________________


 

 


 


 




 

-25-








 






 



Exhibit A


 



12% Secured Convertible Note


 



(attached)


 


 

 




 

-26-








 






 



Exhibit B


 



Security Agreement


 



(attached)


 


 


 



 

-27-







 






 

 



Exhibit C


 


Guaranty
Agreement


 



(attached)


 


 


 



 

-28-







 






 



EXHIBIT D


 


Intercreditor
Agreement


 


(attached)


 


 


 




 

-29-